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The President of What?

The newly-elected Negotiator-In-Chief, Donald Trump, is likely to name Rex Tillerson, the CEO of Exxon, as the Secretary of State. True to long-standing tradition, his own tradition that is, Trump tweeted this evening that he’ll release the name of the nominee … tomorrow morning. Man knows how to use Twitter to build suspense … plus he loves using Twitter to beat the media to the news. Given how they’ve treated him, I can understand that.

Apparently, the choice of Tillerson is making some people’s heads explode. They complain that Tllerson has no government or diplomatic experience of any kind. They say that we need a diplomat or a politician for Secretary of State, someone with some experience in the field.

Me, I think it is a brilliant choice. I see it differently because I’m a businessman, and because I’ve worked in the oil industry, in distribution. The thing people don’t understand about Tillerson is that “CEO of Exxon” is not really his actual title. Nor does that title reflect what he is really doing or the status he has when he goes around the world.

Tillerson’s official title is the President of Oil, or to use the formal name, the “President of the First People’s Republic of Oil”. It’s the “First” because Exxon is the biggest. It’s the “People’s Republic” because Exxon is a public corporation, meaning that the people own it. You too can be a citizen of the Republic of Oil, with full voting rights, for the mere price of $90.98 per vote. That’s today’s price of one share of Exxon stock.

Here’s the size of Tillerson’s job as President of the Republic of Oil. The GDP of the Republic of Oil, the value of the oil produced by the Republic, is about four hundred billion US$ per year. That’s in the top 15% of the GDPs of the world’s countries. Bigger than Norway. So when he negotiates, he’s dealing with the top people in each of the many countries where the Republic of Oil has an outpost.

And he is negotiating from a position of some power, in that he can mobilize huge resources with the flourish of a pen, and put them to work producing real wealth.

So Tillerson knows Putin. He knows the Saudi leaders. He knows the head of countries all over the globe. And not just the heads, but the department heads, and the regulators, and the bankers, and the people down the food chain.

Not only that, he doesn’t just know those folks. He has negotiated business deals with them.

Tillerson job as the President of Oil is to negotiate deals with other Presidents, diplomats, department heads, and businessmen of foreign countries on behalf of and for the benefit of the citizens of the First People’s Republic of Oil, also known as shareholders. That’s his job, cutting deals with foreign governments. And given the ongoing success of the Republic of Oil, we know for a fact that he’s good at making deals with foreign governments for the benefit of the citizens of the Republic of Oil.

Call me crazy, but if I was going to put someone in charge of US diplomacy, which is assuredly the cutting of deals on behalf of US citizens, it sure seems like that guy might be a damn good choice …

Unlike most commentators, I see his lack of government service as a huge asset. Here’s the thing. He hasn’t been in government service.

But like almost every businessman, he’s been in service to government, through a million required meetings and permits and regulations and applications for his entire business life. He knows government from the other side of the permit application counter, and for me, that’s a good thing.

So if tomorrow the Negotiator in Chief does appoint him, I can only say, fasten your seatbelts and keep your hands inside the vehicle, we’re looking at a new kind of diplomacy.

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43 thoughts on “The President of What?”

Congratulations for the blog Willis. I expected to see more climate-related posts, but somehow I like the fact that it won’t be but a side topic (or so it looks so far). Are you planning to still put articles from time to time in WUWT? Good luck with whatever you decide to do, you deserve it. Best regards.

“You too can be a citizen of the Republic of Oil, with full voting rights, for the mere price of $90.98 per vote. That’s today’s price of one share of Exxon stock.”

What you say is correct. But it is quite different from Democracy. In a democracy a persons worth is intrinsic, hence one person one vote.

In an Exxon republic a persons worth is valued by the number of shares they own. Now I am not complaining about the rules of Pty Ltd. I agree that people with the most skin in the game should have a proportional vote. But the rules are different from citizens in a democratic republic..

Willis I have enjoyed your posts on WUWT over the years and have now read what you have to say on your own site.
I can see what you are saying about Donald Trump being a very clever man in what he is doing and saying, he is coming at the job of president as he would any business finding out all he can about what/who/how and why things are as they are and what changes would make it and the people work better. A big part of that is getting the right people working in the right posts not just yes men/women but those who will be able to explain why their way is different from your way and having the trust in their judgement.
In business you are risking yours and your shareholders money so your livelihood is on the line, unfortunately in government it is other peoples money and there is an almost endless supply to play with trying this and that and changing your mind almost as often as your shirts. If it goes wrong well you move on to consulting or lobbying (brilliant move to block this by Donald).
All the best with the blog I will be looking to see what else has caught tour interest.

There are good reasons why a business person who is expert in “cutting deals with foreign governments” may not be the ideal Secretary of State.

Firstly, in a negotiation the goal of the business person will be to achieve a deal, and the objectives of the negotiation are clear. In international relations, objectives need to be defined and sometimes (perhaps often) it will be better not to do a deal. Sure a good business person needs to know when to walk away from a bad deal, but that is still part of the process of getting the best deal possible.

Secondly, business deals are typically transactional and specific in scope. In international relations you need to consider not just the deal being negotiated but the multi-decade relationship with the other country, with your allies, and the relatiosnhips between your negotiating party and their allies. Perhaps your long-term interests are to separate the other side from their allies. Business skills do not help with this kind of issue.

Thirdly, business deals are most frequently 1 to 1. Trump is already showing he wants to move away from multi-country deals. However in international relations the best and most valuable deals involve many countries. This is true whether the subject is nuclear disarmament, pollution, trade, international law, human rights or many other things. A business person may not be prepared to go through the long painstaking negotiation required to close such a deal, and would instead move to simpler quicker but less effective detals.

Finally, in international relations the soft message and signals really matter. We live in a world where it is possible to bring a diplomatic crisis and even a war closer, simply by taking a congratulatory phone call from the wrong person. Perhaps ignoring such ‘nicities’ can be effective, but other countries look for messages in these actions.

Andy, thanks for your objections to a businessman being a diplomat. You start by saying:

Firstly, in a negotiation the goal of the business person will be to achieve a deal, and the objectives of the negotiation are clear. In international relations, objectives need to be defined and sometimes (perhaps often) it will be better not to do a deal. Sure a good business person needs to know when to walk away from a bad deal, but that is still part of the process of getting the best deal possible.

I don’t understand this. If you think that the objectives of business negotiations are “clear”, perhaps you haven’t done much business particularly outside the US. Suppose some country comes to Exxon and says they want to re-negotiate a deal … what are their goals? What are their objectives? And given that at the beginning Exxon may not know either of those, Exxon’s own goals and objectives are equally unclear—does Exxon want to renegotiate, or would it be better to propose an alternative deal, or should they just walk out? They won’t begin to know the answer until the middle of said negotiation … business is all about being able to deal with such undefined and uncertain situations, and not doing a deal is always an option.

Secondly, business deals are typically transactional and specific in scope. In international relations you need to consider not just the deal being negotiated but the multi-decade relationship with the other country, with your allies, and the relatiosnhips between your negotiating party and their allies. Perhaps your long-term interests are to separate the other side from their allies. Business skills do not help with this kind of issue.

Again, this shows a lack of familiarity with business decisions. Any Exxon business decision can easily affect a multi-decade relationship with the other country, with Exxon’s allies, and the relatiosnhips between the other country and their allies. The oil business is probably the most highly politicized business in the world, and I can assure you that they don’t negotiate deals without considering all the relationships, friendships, and enmities you mention, plus a lot more. I was being serious. Taking into account all of those geopolitical issues is part of the daily job of the President of Oil.

Thirdly, business deals are most frequently 1 to 1. Trump is already showing he wants to move away from multi-country deals. However in international relations the best and most valuable deals involve many countries. This is true whether the subject is nuclear disarmament, pollution, trade, international law, human rights or many other things. A business person may not be prepared to go through the long painstaking negotiation required to close such a deal, and would instead move to simpler quicker but less effective detals.

I’ve not heard Trump say he “wants to move away from multi-country deals”, and I doubt he thinks that. Do you have a source for that claim?

What Trump is looking for are GOOD deals, regardless of whether they involve one country or many. His beef with NATO, for example, is financial, not fundamental—he wants all the countries to pay their fair share.

Next, I fear you are wrong about business deals. In 2016, many, many business deals are NOT “1 to 1”. Particularly when you do business outside the US, business deals often involve a variety of government, non-government, business, and other actors and stakeholders. I know that because I’ve been a participant in those business meetings in other countries. Your view of business is quite valid for Jane and Jim negotiating merging their grocery stores, but that is NOT what the President of Oil is doing on a daily basis.

Finally, in international relations the soft message and signals really matter. We live in a world where it is possible to bring a diplomatic crisis and even a war closer, simply by taking a congratulatory phone call from the wrong person. Perhaps ignoring such ‘nicities’ can be effective, but other countries look for messages in these actions.

I’ve said from the start that people were wildly underestimating Donald Trump. I hold fast to that. The idea that he took that action without discussing it with his people and making a conscious decision to send a clear signal is hilarious. He’s many things, but he’s not a fool. Quite the opposite. He’s a very smart man. He did that deliberately, and very cleverly in my opinion. I should probably write up my analysis of that, but the TL;DR version is that he sent a very ambiguous signal to the Chinese, one that many folks could interpret as a noob mistake … but one which would be unmistakeable to the Chinese. Do not be misled. It was a calculated and deliberate move.

In closing, my profound thanks to you for your disagreement with my ideas. It is only by discussion that we can move forwards, and that can only happen when people clearly state their ideas as you have. Well done.

Agree with pretty much everything you wrote. I think opposition comes in two main forms, democrat lefties who reflexively oppose anyone involved in fossil fuels. Republican establishment types and conservative media types who think only Washington insiders have this entitlement.

Have to agree with your assessment of the situation. Mr Tillerson is intimately acquainted with “government” and how it functions and he is not beholden to it, as would be a person with decades long employment in government. I, being a citizen who voted for Trump because I am tired of being stabbed in the back by ALL politicians, hope DJT continues to put people like this in prominent Cabinet and Administration positions.

Oh, meant to add, all those criticizing these picks as being unqualified, would they have leveled the same charge at, say, Joe P Kennedy or William Donovan? Their only qualifications were being financially successful and close personal friends of Franklin Roosevelt. So far I don’t see DJT doing that. A bit of historical perspective goes a long way.

No. That advocacy happened only after Exxon bought gas fracker XTO for $32 billion. A carbon tax would penalize coal most and gas least. Woild accelerate the move away from coal fired electricity generation. Just business, while also a smart optics move against the Oreskes ‘Merchants of Doubt’ movement that lead to the Schneiderman/Healey over-reach.

My first thought when I heard Tillerson was being considered was… That’s crazy. However, the more I think about it, the more it makes sense. ExxonMobil probably had more foreign policy success under Tillerson and his predecessor, Lee Raymond, than contemporary US governments. Plus… It p!$$es off the right people… 😉

He’s a boyscout, and that might be an interesting thing, they tend to have purer hearts. And I admire the position of older adult men initiating younger males into the fraternity of man. His previous ofliations with world leaders and his lose friendship with Putin, might serve to cool the slings and arrows of the Clintonistas. And because the business opportunities it will open up in the oil and gas fields.
Is cronyism a factor here? His support of common core has no relevance in the office he will perform.!
All and all he seems like a sound choice I agree…I like your words, you have a good head.

The really fun part up here in AK is that current governor has been using Exxon as a personal punching bag since the Exxon Valdez spill (Walker was mayor of Valdez a decade before the spill) which has served to encourage them to take their investment money elsewhere. Punching Exxon is a lot like punching a gravel pile. This may be Walker’s worst nightmare and will be great fun to watch.

You nailed it. Tillerson has in effect been a successful diplomat for many years. State needed competence, and Trump provides a competent nominee. EPA needed a constitutional reigning, and Trump provides state AG Pruitt whomunderstands that better than almost anyone. DoE needs a thorough house cleaning, and Trump provides former Texas Governor Perry who,campaigned to abolish DoE. DoD needs to get its act together ($135 billion in back office waste, F35, littoral combat ship program) and Trump provides Mad Dog Mattis. Going to be quite the ride next few months.

In a (UK) Sky TV paper review this evening, a newspaper editor reviewer commenting on the story was bemoaning the nomination of Tillerson on the basis that he’s never done a single day’s work as a diplomat, ie he’s an outsider. He seems to have forgotten the extremely low credibility rating of professional politicians at present and that Tillerson is thus eminently qualified for the job.

Hilarious. I just found out that in the industry, Rex Tillerson’s nickname is “T. Rex”. This is awesome! Our Secretary of State nominee is T. Rex and our Secretary of Defense nominee is Mad Dog … what’s not to like?

Since around 2010-11 I had stopped recommending National Review articles to friends and family, Powerline followed in ’12. A consistent leaning to the left is not something I really wanted to help spread. I link specific articles and documents and give no positive recommendation to any politics related web site or group, for the most part, anymore.

Mark Levin was all over this this evening too. He was not pleased. I scratch my head though, wondering if Tillerson was maneuvering Exxon to present the minimal cross section area for incoming fire. We know that democrat controlled government agencies at all levels determined that oil was the functional equivalent of the AntiChrist. And as head of the largest target, perhaps Tillerson was doing his level best to minimize his company’s liability to incoming fire. Exxon did not lie down and play dead when the Exxon Knew democrat Attorneys General came after them. Perhaps he is turning sideways with this.

My world view is unfortunately Pollyannaish, so I also know my own limitations. The best way is to let this all play out for a while before instantly lighting hair on fire and running around screaming bloody murder. I am prepared to be hugely disapointed, but given the appointees so far, I am cautiously optimistic on Tillerson, DOE and the EPA.

UPDATE: Today a commenter in a PowerLine thread on T Rex posts a link to a 2012 (?) video clip of him discussing ‘climate change’:

My comment:

“That’s actually a very encouraging clip. T Rex says that CO2-induced warming may be real, but the question is one of magnitude, and he suggests that it’s nothing that humans can’t adapt to with modest engineering effort–a few inches of sea-level rise, for instance.

“He also says, in the second part of the clip, that the real issue is the billions of people mired in poverty in the world, and their need for cheap, efficient energy, i.e. fossil fuels. And lest you think that this is just self-serving from an oil-company executive, the electricity for the undeveloped world will come from coal.”

As for PowerLine, I find it a valuable and interesting conservative site, and have ever since Rathergate.

Everything I am finding about him is, kinda, OK. Long career corporate types always worry me(not as much as long career government types), this one appears to not be so much of a problem. Apparently. Maybe. We will have to see what he does.